The government plans to cut its 45 percent stake in Vinamilk, one of the country’s most sought after firms among foreign investors, into several small pieces before offering them to the public.

However, the sale of minority stakes might largely cut into the actual revenue that the government is supposed to earn by about $1 billion, Zing News cited the Association of Financial Investors (VAFI) as saying.

Big investors are not interested in buying minority stakes in state-owned enterprises because being minority shareholders prevents them from joining management boards. This means they will not have much say on corporate governance or have enough power to push through reforms to boost efficiency, said the VAFI.

“By selling Vinamilk stakes in small pieces at a time, the State may earn $1 billion less than if it put the whole 45 percent stake up for sale,” said the VAFI.

The VAFI explained that global investors, including multinational dairy giants, would be more willing to pay a premium to own a 45 percent in Vinamilk.

“An offer like this would be attractive to investors,” said the VAFI.

The government’s 45 percent stake in Vinamilk is now valued at about $4.5 billion on the stock market, and the State Corporation of Investment Capital (SCIC) is about to make the first 9 percent public offering worth more than $800 million at the current market price.

The SCIC said it has hired top-tier advisers, led by Morgan Stanley Asia, to help evaluate its options for the sale.

In the government's latest privatization push, it is estimated that the country could rake in more than $5 billion following share sales in 10 major listed companies with public stakes managed by SCIC, including Vinamilk, IT firm FPT and insurer Bao Minh.

Successful exits from Sabeco and Habeco, which are currently under the control of the Trade Ministry, will add $2 billion more to the nation’s coffers.